Expanded Anti‑Money‑Laundering Regulations

Summary#

This is a proposal to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations and the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations. If adopted, it would expand anti‑money‑laundering rules to cover trade reporting, allow voluntary private‑sector information sharing, require certain reporting of company ownership discrepancies, and bring several new business types into the reporting regime. The government estimates the package would cost about $74.3 million over 10 years. The proposal was published on November 30, 2024 and many measures would take effect on October 1, 2025 if finalized.

What it does#

• Trade reporting at the border

  • Requires traders to tell the Canada Border Services Agency (CBSA) whether imported or exported goods are linked to money laundering, terrorist financing, or sanctions evasion.
  • Adds attestations, record‑keeping, and powers for the CBSA to ask questions, seize goods, and impose monetary penalties.
  • Penalty ranges cited include $1 to $500 for some minor contraventions and, in other cases, penalties tied to the value of the goods.

• Private‑sector information sharing (voluntary)

  • Allows regulated businesses to share information with one another to spot suspicious patterns.
  • Sets up a voluntary Code of Practice system that must be approved by the Office of the Privacy Commissioner (OPC), with a review clock of 90 days (plus an optional 15‑day extension).
  • FINTRAC (Canada’s financial intelligence unit) can comment on codes; privacy protections and oversight are required.

• Beneficial‑ownership discrepancy reporting

  • Requires reporting entities to tell Corporations Canada when they find a material mismatch between a client’s ownership information and the federal beneficial‑ownership registry — but only where they judge there is a high risk of money laundering or terrorist financing.
  • Minor penalty range proposed: $1 to $1,000 per violation.

• New reporting sectors and thresholds

  • Treats factoring companies, cheque‑cashing businesses, and financing and leasing entities as reporting entities with duties such as client ID checks, record keeping, transaction reporting, and compliance programs.
  • Key money thresholds:
    • Large cash / virtual currency reporting threshold: $10,000.
    • Cheque‑cashing and certain factoring receipt threshold for ID/records: $3,000.
    • Financing/leasing coverage for consumer goods valued at $100,000 or more (and for passenger vehicles).
  • Penalties for non‑compliance range from minor ($1 to $1,000) up to $500,000 for very serious violations.

• Timing and procedure

  • The information‑sharing rules would come into force immediately on final publication in Canada Gazette, Part II. Other measures (trade reporting, discrepancy reporting, and the new sectors) are slated to begin on October 1, 2025 if approved.
  • This is a proposal; stakeholders were invited to make representations within 30 days of the Canada Gazette notice.

Who's affected#

• Businesses that trade goods across the border: about 272,060 importers, exporters, customs service providers and carriers are estimated to be in scope for trade reporting duties.
• Existing reporting entities under the PCMLTFA (banks, money services businesses, casinos, accountants, insurers, real‑estate professionals, securities dealers, etc.): roughly 25,497 existing reporting entities.
• New reporting sectors:
  • Factoring companies (about 65 firms noted in the analysis).
  • Cheque‑cashing businesses (about 600).
  • Financing and leasing entities (about 200).
• Government bodies that will implement and oversee the rules:
  • CBSA, FINTRAC, Corporations Canada, and the Office of the Privacy Commissioner.
• Small businesses and the public:
  • The RIAS estimates 134,363 small businesses would be affected, with an average annualized compliance impact of about $3,077 per affected small business (annualized).
• Corporations listed in the federal beneficial‑ownership registry — their filings could be the subject of discrepancy reports from reporting entities.

Why it matters#

• Closes gaps used in trade‑based money‑laundering schemes. The trade rules aim to give the CBSA tools to spot and act on suspicious trade transactions that can hide cross‑border value transfers.
• Helps private firms spot patterns across different financial services. Limited information sharing among firms has been identified as a weakness; a voluntary, supervised framework is meant to improve detection while keeping privacy safeguards.
• Improves ownership transparency. Asking regulated firms to flag serious mismatches with the federal registry is intended to make the registry more reliable for law enforcement, tax authorities, and the public.
• Brings more businesses under the same rules. Adding factoring, cheque‑cashing, and financing/leasing firms aims to reduce places criminals can exploit and to align Canada with international standards set by the Financial Action Task Force (FATF) ahead of Canada’s mutual evaluation in 2025–26.
• There is a cost. The government’s central estimate is $74.3 million in present‑value costs over 10 years, distributed mostly to businesses. The proposal balances those costs against harder‑to‑quantify benefits like reduced crime, stronger market integrity, and international reputation.
• It is a proposal, not yet law. Interested people or groups can comment (the notice set a 30‑day window from publication). The final shape, timing, and real‑world impact depend on the outcome of that process.